I don't think there is a max on the resolution, just the actual image size which is under 102k (I think it may be 105k though)
With that said - I am a guilty party of this before I rememberd how to resize an image - pictures that are set at 1280x960 show up REALLY big and screw the formatting of the post up.
Smaller is better when it comes to posting a pic, most of the posts I see have a resolution of around 400xwhatever makes it square - think its like 260 or something.